euro adhoc: freenet AG / quarterly or semiannual financial statement / freenet AG begins new "era" as merged company with gratifying first-quarter results

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3-month report

14.05.2007

freenet AG begins new "era" as merged company with gratifying first-quarter
results
• Customer basis enlarged in all growth segments
• EUR452.4 million in revenue
• Gross profits on the rise: EUR142 million
• All results improved year on year (vs. Q1/2006): EBITDA EUR65.5 million;
EBIT EUR50.9 million; EBT EUR55.8 million; consolidated profits EUR49.9 million

Hamburg, 14 May 2007 -freenet AG delivered a positive first-quarter
performance despite an intense competitive environment. Its results
underscore the group´s excellent positioning in Germany´s Internet
and telecommunications market. The company improved its customer
numbers in all growth segments - to 5.12 million mobile telephony
customers (+ 24´000 customers vs. Q4/2006), 1.59 million customers in
paid services (+ 80´000 customers vs. Q4/2006) and 1.17 million DSL
users - an increase by 165´000 new DSL customers, including Tiscali
customer relationships acquired at the beginning of the year. In all,
freenet had roughly 12.7 million customers throughout the group, of
which 6.13 million were permanent subscribers (contract customers).
Changes in commission and settlement models with Deutsche Telekom
over the course of the year, and the partial recognition of customer
recruitment and customer loyalty costs, limit the comparability of
indexes with prior and comparable quarters. As a result of these
adjustments, the quarterly results show lower revenues against rising
gross profits and results. The above-described circumstances caused
first-quarter revenue to decline by 13.3 percent year on year, from
EUR522.9 million in 2006 to EUR452.4 million in 2007. The decline was
more marked in Mobile Telephony, where revenue dropped by 14.3
percent to EUR278.8 million; Fixed-line/Internet revenue declined by
11.6 percent to EUR173.7 million. Mobile telephony is still the
group´s strongest revenue mainstay. The group´s gross profit and
earnings showed significant year-on-year growth. At the group level,
gross profit for the first quarter of 2007 reached EUR141.9 million,
EUR29.4 million or approx. 26 percent above that of Q1/2006. EBITDA
increased to EUR65.5 million, a 71.9-percent year-on-year increase
(Q1/2006: EUR38.1 million) and 164 percent above the previous quarter
(24.8 million EUR). freenet AG generated EUR50.9 million in earnings
before interest and taxes (EBIT), representing a more than 272
percent improvement over the previous quarter or roughly 88 percent
over Q1/2006. Earnings before taxes (EBT) were up by more than 200
percent over the previous quarter, to EUR55.8 million; this
represents a nearly 90-percent improvement over the first quarter of
2006 lag. First-quarter group profits rose by approx. 177 percent
year on year, to EUR49.9 million. Despite the acquisition of
Tiscali´s customer relationships during the first quarter, cash and
cash equivalents continued to grow, reaching EUR538 million. "One
challenge will be to optimize our company´s capital structure - for
this we will come to a decision still in May", so freenet AG CEO
Eckhard Spoerr.

Year-on-year Key financials of the freenet group:
Accounting method: IAS/IFRS

In EUR millions Q1/2007 Q4/2006 Q1/2006
Consolidated revenue 452.4 530.2 522.9
Mobile Telephony revenue 278.8 348.3 325.4
Fixed-line/Internet revenue 173.7 181.9 196.6
Consolidated gross profits 141.9 112.5 112.4
Group EBITDA 65.5 24.8 38.1
Group EBIT 50.9 13.7 27.9
EBT 55.8 18.5 29.7
Group profits 49.9 n.a.* 18.9
Earnings per share 0.52 n.a.* 0.19
Cash & cash equivalents 538.9 534.9 458.5
Total customers 12.67 12.68 14.94
Of which subscribers (contract customers) 6.13 5.81 5.40

* not comparable due to merger-related effects in Q4/2006

end of announcement euro adhoc 14.05.2007 07:24:46
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ots Originaltext: freenet AG
Im Internet recherchierbar: http://www.presseportal.de

Further inquiry note:
IR-Manager
Andreas Neumann
Tel.: +49 (0)40 51306-778
Patrick Moeller
Tel.: +49 (0)4331 691173
E-Mail: ir@freenet.ag

Branche: Online
ISIN: DE000A0EAMM0
WKN: A0EAMM
Index: TecDAX, CDAX, Prime All Share, HDAX, Midcap Market Index,
Technologie All Share
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